California is an incredible place to live and real estate prices reflect it. Single-family home prices average as follows for the three major metropolitan areas - $620,000 for San Diego, $1,300,000 for central San Francisco and $750,000 for central Los Angeles. As a general rule, the closer the home is to the ocean, the more it will cost.
In April 47,250 new and resale houses and condos were sold in the state of California. That’s down from 54,500 in March which is a drop of 13.3%. April of 2005 was one of the strongest months for real estate in California’s history. What a difference a year makes. Sales were down 21% from last April. Even though sales were down, prices were not.
In April of 2006, prices were up 10.2% from the same period a year ago. The average price of a home in California now is $562,380. Nearly 85% of the cities in California have shown an increase in prices since the same period last year. Since California trends are so important to the Real Estate market, the Real Estate market there is being watched very closely.
One market that is watched closely is the luxury home market. The feeling is in a market downturn, the luxury market will be one of the first markets to suffer. So what is happening in the luxury market in California? Let’s take a look at these markets in Los Angeles, San Diego, and San Francisco.
In Los Angeles values rose 0.1 percent from the previous quarter and 12.4 percent from a year ago. In Los Angeles the average luxury home was priced at $2.29 million.
In San Diego prices rose 0.9 percent from the previous quarter and 6.8 percent from a year earlier. The average luxury home in San Diego priced at $2.1 million. San Diego as a whole has been one of the most overheated markets in California, so the fact that luxury home prices continue to hold up there may be good news for the rest of the homeowners in San Diego for now.
In San Francisco prices were up 1.6 percent from the previous quarter and up 8.6 percent from the same period of time last year. The average price of a luxury home in San Francisco is $2.92 million.
So what direction is the California Market moving? There are investors cashing in on their profits and getting out, however most homeowners are not investors. Investors poured into lower priced markets during the recent boom and areas in Florida and Arizona have many residential investors. The market has started to reflect this. In Phoenix the real estate market is pulling back due to rising inventory from investors trying to cash in, however at this point you couldn’t call this a bust. In other areas of the country prices are still inching up.
In California the market is returning to normal conditions. It will take longer to sell a home and prices may stay flat or increase slowly.
So far the signs of market stress that would indicate a bust are not there. Down payments remain stable and speculation buying is moderate. The default rates are up; however these rates are still low.
To get regular updated information regarding California real estate visit this website or contact me.
Sincerely,
Real Estate Knowledge and Facts Group.
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